Big Tech’s Massive Spend Is Masking a Slowdown in Capex Growth
- Top seven companies’ capital expenditure grew 40% last year
- For rest of S&P 500, it rose just 3.5%, Societe Generale says
AI’s massive potential to transform almost every industry pushes technology companies to continue spending on research and development.
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As Corporate America reports fourth-quarter results, a chasm is opening between the seven biggest companies in the S&P 500 Index and everyone else. The giants are boosting their spending at a rapid pace, while the others are barely treading water.
The biggest companies — often called the Magnificent Seven — have been increasing their business outlays on things like property and equipment, spending 40% more on the category in 2024 than the year before, according to strategists at Societe Generale SA. The rest of the S&P 500 grew capital expenses by just 3.5% last year, the strategists added.